Travel money: the best current accounts and credit cards for holidaymakers to save on fees abroad this summer

• Holidaymakers are being encouraged to explore current account and credit card options to save on fees when travelling abroad
• Some current accounts charge for card use abroad, but many providers have eliminated these fees
• Opening a new account or switching banks can be beneficial for frequent travellers to avoid high fees and carry less cash
• "Challenger" brands and "added value" accounts offer perks like interest-free overdrafts, cashback and no fees abroad
• Cards from Tesco Bank, Nationwide Building Society and Virgin Money do not charge for use abroad

Holidaymakers travelling overseas this summer are being encouraged to explore current account and credit card options that can help them save on fees and charges.

While some current accounts impose charges for card use abroad, several providers have eliminated these fees, including charges for using foreign ATMs and overseas debit card transactions, according to financial ratings company Defaqto.

For frequent travellers, opening a new account or switching banks before their next trip could be particularly advantageous. Using the right card abroad can also help holidaymakers avoid the need to withdraw and carry large amounts of cash.

Which accounts should I check out?

“Challenger” brands are among those competing on fees. Current accounts highlighted by Defaqto which may potentially help people save on fees abroad include those offered by Chase, First Direct, Starling Bank, Kroo and Virgin Money.

Many of these accounts also come with other perks that people may want to weigh up, for example, First Direct’s 1st Account has a £250 interest-free overdraft, while Chase offers cashback on purchases and several accounts also pay interest on deposits.

Defaqto’s analysis of the market also found several “added value” accounts that do not charge fees abroad. With this type of account, people pay a monthly fee in return for added benefits.

Katie Brain, a banking expert at Defaqto said: “If you’re happy to pay a monthly charge for a bank account in exchange for things like travel insurance then you could look into added value current accounts which don’t charge fees overseas. Two-thirds of all added value accounts in the UK offer no fees abroad now.”

Defaqto said that Lloyds and Bank of Scotland are among the banks offering these types of accounts.

When weighing up added value accounts, Brain suggested that in general: “It’s important to review the levels of cover offered and consider whether you will use all of the benefits included. If not, then these may not be the best option for you.”

Which cards could save me fees?

Looking at credit cards which do not charge for use abroad, Defaqto highlighted offers from Tesco Bank, Nationwide Building Society and Virgin Money. Some cards also include zero interest on purchases for a set period.

Brain added: “A credit card with a 0% purchase offer can be a good option when travelling abroad because you can spread out your holiday spending over the 0% period.”

In general, holidaymakers may also want to bear in mind that they could potentially be charged fees that are out of their account provider’s control, for example, charges levied by an ATM operator, which would likely be shown on the screen at the time.

Here are some tips from Defaqto when using a card abroad:

• Check to see if your card can be frozen when abroad so if you lose it, the card cannot be used
• If possible, have a separate card, second current account or credit card, in case your main card is lost or stolen
• Consider having one Visa and one Mastercard in case one of the systems goes down

We'd love to hear your experiences and tips on saving money while travelling abroad! Have you found a great current account or credit card that offers fantastic benefits overseas? Share your insights and recommendations in the comments section.